THE Liberal Democrats will seek to pull the rug from under Plaid Cymru’s feet if Plaid decides to favour a coalition deal with Labour, it emerged yesterday.

Welsh Liberal Democrat Assembly leader Mike German said that if Plaid turned its back on the prospect of a rainbow coalition with the Conservatives and the Lib-Dems, he would recommend that his party reopens talks with Labour.

More than six weeks have elapsed since the National Assembly election on May 3 when Labour won just 26 of the 60 seats.

Although Rhodri Morgan has been re-elected First Minister, he could still be ousted if the three opposition parties cut a deal.

Last night Labour fuelled continuing speculation by refusing to rule out a fresh attempt to reach an agreement with the Liberal Democrats.

On Saturday Plaid’s national executive endorsed their Assembly group’s recommendation to carry on talks with Labour about forming a coalition to run Wales.

Rhodri Morgan has already promised that a referendum on full lawmaking powers for the Assembly would be held within four years, and that the Welsh Labour machine would be swung behind a campaign for a Yes vote.

But this has angered many within Labour, including a number of AMs. Many Labour MPs are also opposed to conceding a referendum at this stage, and would favour a deal with the Liberal Democrats instead.

Some Plaid insiders believe that when it comes to the crunch, Labour will revert to expectations and seek a deal with the Liberal Democrats.

They point out that Labour only began talking to Plaid in earnest when it appeared the prospect of a deal with the Liberal Democrats was over, and that they would otherwise be forced into opposition.

Mr German told the Western Mail, “We suspended talks with Labour; we did not break them off. They remain suspended. At the moment I am reassured by what I have heard from (Plaid leader) Ieuan Wyn Jones. He has made it clear that the rainbow coalition remains an option for his party. I am also pleased that Plaid are likely to decide within days what their preferred option is.”

But asked whether the Liberal Democrats were likely to be left out in the cold, Mr German said, “I have no intention of being left without a shirt. If Plaid walked away from the rainbow deal, I would recommend to my group and my party executive that we should reopen talks with Labour.

“But we are not going to be the ones who steer the ship on to the rocks. We think the All Wales Accord (negotiated between Plaid, the Conservatives and the Liberal Democrats) is a great deal and hope Plaid Cymru will choose it.”

Mr German said that if his party reopened negotiations with Labour, it would expect to be part of a proper coalition.

“I think I’ve never favoured pacts,” he said, referring to the possibility of a New Zealand-style stability pact under which the Lib-Dems would back a Labour administration from outside the Government in return for agreed policy commitments.

“What they do is get you quite a lot of criticism without allowing you to sell your message.”

Meanwhile Plaid continues to try and keep all the balls in the air as it tries to juggle its options between choosing Labour and a rainbow coalition.

Responding to the suggestion that Labour could end up doing a deal with the Liberal Democrats, Mr Jones said, “We have conducted these negotiations in good faith and we hope that others are doing so too.

“We could not have a sustainable government for Wales if we were constantly thinking that the other party was positioning itself to do a deal with somebody else.”

A senior Plaid source close to the negotiations told the Western Mail, “You always have to expect the unexpected in Welsh politics, but I don’t think there’s any way back for the Liberal Democrats while Plaid and Labour are talking.

“We’re not talking to anyone else at this stage, and neither are Labour.

“My understanding is that that will remain the case while the possibility of a Labour-Plaid deal is on the table. Obviously if negotiations between us fail over the next 10 days, the parties would be free to talk to others.

“But I don’t think there’s any chance Labour would two-time us, and neither would we two-time them. You can’t do it that way.

“We are conscious that the eyes of the Welsh electorate are on all of us. Negotiations have to be carried on in good faith, and it would be farcical if some other deal was being discussed that we didn’t know about.

“We have to take negotiations with Labour as far as we can.

“Both sides – Labour and Plaid – are concentrating on this option. I hope it’s successful, and believe there’s a strong chance it will be.”

Labour refused to comment yesterday on the possibility of resuming talks with the Liberal Democrats.

A special Welsh Labour conference is due to take place on July 6, but while a statement issued by party chair Tecwyn Thomas on Friday said the conference would discuss the possibility of a coalition, it did not specify that any proposed deal would involve Plaid Cymru.

The following day, on July 7, the 377 members of Plaid’s national council will meet at Pontrhydfendigaid, Ceredigion.